Key Legal Victory for 23XI Racing and Front Row Motorsports in NASCAR Lawsuit
A federal judge issued a significant victory for two racing teams, one of which is owned by Michael Jordan, increasing pressure on NASCAR to resolve the antitrust lawsuit filed by 23XI Racing and Front Row Motorsports. United States District Judge Kenneth Bell ruled in favor of 23XI, owned by Jordan and Denny Hamlin, three-time Daytona 500 winner, and Front Row, owned by Bob Jenkins, in a dispute over the definition of the “premier stock car racing” market. Bell determined that NASCAR controls the market and that NASCAR’s argument that teams can race in other series is debatable. The teams argued that the relevant market for top-tier stock car racing teams is that “NASCAR’s Cup Series is currently the only buyer.” The argument was supported by the expert opinion of Dr. Daniel Rascher, who concluded that “top-tier stock car racing” is a distinct form of auto racing, and that other types of motorsports such as Formula 1 and IndyCar, as well as all lower levels of stock car racing, are not an equal substitute for NASCAR.The lawsuit was filed a year ago by 23XI Racing and Front Row Racing, when they were the only two organizations out of 15 that did not sign extensions to the new franchise agreements. These agreements are crucial to NASCAR’s business model, as they guarantee revenue and access to weekly races. 23XI and Front Row would likely go bankrupt without them and are running this season without a franchise, which entails a significant reduction in prize money. The trial is scheduled for December 1st. The lawyer representing 23XI and Front Row, Jeffrey Kessler, stated:NASCAR made a strategic decision by asserting its counterclaim and must now live with the consequences.
Judge Kenneth Bell
The NASCAR organization, in its statement, highlighted its commitment to making NASCAR the leading motorsports series in the United States since its founding in 1948. NASCAR added:We are very pleased with the Court’s decision today, which ruled in our favor. This means that the trial can now focus on whether NASCAR has maintained that power through anticompetitive acts and has used that power to harm the teams. We are prepared to present our case to the jury and are focused on obtaining a verdict that benefits all teams, partners, drivers, and fans.
Jeffrey Kessler
Most of the organizations that did sign the new franchise agreements last year filed statements with the court in support of the franchise system and asking for a settlement in the case.NASCAR hopes to demonstrate that it became the leading motorsport in the United States through hard work, risk-taking, and many significant investments over the past 77 years.
NASCAR Statement
In the event that an agreement is not reached before the trial and NASCAR loses, the entire franchise system risks being dismantled or revised. The teams are frustrated by that threat, and it is understood that NASCAR has since agreed to make the franchises permanent and the issue in the settlement negotiations is the amount of money that 23XI and Front Row are demanding in damages and legal fees.
Teams are concerned that the entire NASCAR framework could be destroyed by a loss and are upset because it would be due to the monetary demands being made by 23XI and Front Row. Bell issued another win last week for 23XI and Front Row when he dismissed NASCAR’s counterclaim against Curtis Polk, Jordan’s longtime business manager and one of the owners of 23XI.
